Why America is losing the global talent war

Immigrant entrepreneurs have launched many of America's iconic businesses.

John Torrens, Ph.D., founder and president of Liberty POST and a member of the CNBC-YPO Chief Executive Network

Tuesday, 5 May 2015 | 11:00 AM ETCNBC.com

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It's commencement season and hundreds of thousands of college students across the U.S. are preparing to graduate and begin searching for a job, working at their first job or entering a graduate program. Thousands more are pursuing their entrepreneurial dream of business ownership.

One group of students, however, is not pursing that entrepreneurial dream—at least not here in the U.S. This is the group of foreign students who will be sent back to their own countries because U.S. immigration policy does not allow them to stay. As a result, we experience the unintended consequences of simply discarding some of the best, brightest and most talented young people after having spent the past four-plus years educating them.

Bill Clark | CQ Roll Call | Getty Images

Immigration reform protesters march to the White House last August.

If these students were hired by a U.S. company after obtaining a work visa, they would be able to stay. Likewise, if they were continuing their education on a student visa, they could stay and contribute to the local and national economy by paying taxes and practicing American consumerism on a variety of levels.

In contrast, if a foreign student was engaged in a high-potential start-up company, he or she would have very few options but to return to their native country. As a result, they would never have the chance to contribute like their "working" peers, but the real missed opportunity is the company that never blossoms, the jobs that don't get created and the products or services that never materialize to solve the problems they were created to solve.

Immigrants have been at the core of American ingenuity and creativity for as long as the U.S. has existed. There must be a way to harness the unfathomable talent that otherwise gets gift-wrapped and delivered back to the rest of the world.

In 2010, 40 percent of the Fortune 500 companies were founded by an immigrant or the child of an immigrant, and in 2011 they employed 10 percent of all American workers. This includes some of the world's most iconic U.S. based companies, from Google and eBay to Comcast, Kohl's, Nordstrom's, Pfizer, DuPont and Goldman Sachs.

"The U.S. needs to get over its xenophobia and welcome these young people with open arms rather than considering them an acceptable side effect of keeping out the bad guys and freedom haters."

The success of immigrant entrepreneurs makes sense when you consider that many of them often come here with very little and have no choice but to do what it takes to succeed. In terms of creativity, what better way to get out-of-the-box thinking than from someone who is, quite literally, from outside the box of the U.S. border? They bring a unique perspective and a drive that is difficult to replicate in native-born Americans, and yet we seem to go out of our way to make starting a company here as difficult as possible.

The U.S. needs to get over its xenophobia and welcome these young people with open arms rather than considering them an acceptable side effect of keeping out the bad guys and freedom haters.

Some countries, like Canada and New Zealand, are mounting credible challenges to America's entrepreneurial leadership by welcoming foreign talent with entrepreneur-friendly immigration policy. Using what are referred to as start-up visas, these countries provide foreign entrepreneurs a pathway that doesn't require them to be employees or students. Instead, they qualify for these visas based on various criteria, such as raised capital, founder investment, sales, jobs created or other meaningful metrics.

While the U.S. has shown an interest in creating an environment where it can compete for this talent, Congressional gridlock and partisan, fear-based immigration dogma have caused recent efforts to stall (e.g., the Start-Up Act 3.0). Some elected officials do see the light and understand the need to make a course correction in order to allow potential immigrant entrepreneurs to build their companies and create jobs here. The magnitude of such a change could be somewhere between 500,000, to 1.5 million jobs over a 10-year period, depending on the benchmark used.

For the latest read on the global economy from Young Presidents' Organization members, check out the just-released YPO Global Pulse Survey.

—By John Torrens, Ph.D., is the founder and president of Liberty POST, a pediatric rehabilitation and health-care company, as well as a professor of entrepreneurial practice at Syracuse University's Whitman School of management.

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